How a Zerodha User Reclaimed Rs9 Lakh Lost due to Technical Glitches - and How You Can Too
Moneylife Digital Team 13 July 2024
A trader on the Zerodha platform known by the social media username 'Overtrader', recently faced a harrowing experience when a technical glitch on the trading platform led to a loss of approximately Rs10 lakh. The incident shows the potential risks traders face in the digital age and the steps one can take to seek resolution. It also highlights the importance of proper documentation and persistence in following up with your complaints.
The user's ordeal began during a trading session when he placed multiple market orders starting at 9:19am. To his dismay, these orders appeared in his orderbook with an 'open' status, and despite numerous attempts, he was unable to cancel them. The trader noticed his available margin fluctuating, indicating that something was amiss behind the scenes.
The root cause of the problem lay in Zerodha's server-side implementation. While the orders were successfully transmitted to the National Stock Exchange (NSE) and executed, Zerodha's systems failed to update the order status from 'open' to 'complete'. This critical error left the trader in the dark about his actual positions and prevented him from managing his trades effectively.
Recognising the gravity of the situation, the user took swift action to document the issue:
1. He captured screenshots of his unsuccessful attempts to cancel orders and the changing margin values.
2. He noted Zerodha's official notice acknowledging a status update delay for older orders.
3. He documented the sudden appearance of executed orders at 10:30am, reflecting trades placed an hour earlier.
4. He compiled evidence showing unusual trading patterns inconsistent with his typical strategy.
Armed with this documentation, Overtrader escalated the matter through multiple channels:
1. He raised awareness on social media platform X (formerly Twitter), providing a detailed breakdown of the technical issue.
2. He created a support ticket with Zerodha at 12:31pm.
3. He filed a complaint with SEBI Scores at 12:45pm.
While Zerodha's response was to brush off the client. It said, “We are really sorry, we take the full accountability however no refund will be issued.”
However, once the post started being reposted, Zerodha saw sense and issued a refund of Rs9,00,000 against a loss of Rs9,56,000.
It is important to note that this incident is not isolated. The platform has faced multiple technical glitches in recent times, causing significant distress to many traders.
Many Zerodha users took to social media to voice their frustrations about tech glitches related to placed orders. One user reported a loss of 10 lakh rupees due to orders executed 1.5 hours after placement, emphasising the severity of the issue: "This is money we earned by hard work. I want my money back and going to court."
Another trader expressed sympathy for fellow users facing losses and revealed that they had stopped using Zerodha 11 months ago due to similar issues with missed orders. They advised others to consider alternatives and migrate to other platforms.
In 2023 alone, Zerodha admitted to at least eight technical glitches, with issues ranging from login problems on the Kite app to display errors for orders and positions, as well as order placement difficulties. Zerodha is India's second-largest broker with a 17.5% market share.
This pattern of recurring technical issues highlights the importance for traders to remain vigilant, document any problems thoroughly and be prepared to advocate for themselves in case of financial losses due to platform glitches. The frequency of such incidents across the platform underscores the need for robust risk management strategies for all online traders. 
This incident serves as a valuable case study for traders facing similar technical issues on trading platforms. Here's a guide on how to effectively raise and document complaints regarding technical glitches:
1. Act Quickly: As soon as you notice a technical issue, begin documenting it immediately.
2. Capture Evidence: Take screenshots or screen recordings of the problematic behaviour, error messages and any official communications from the platform.
3. Maintain a Timeline: Record the exact times of key events, including when the issue started, when you attempted to resolve it, and when you contacted support.
4. Document Unusual Patterns: If the glitch causes your trading activity to deviate from your normal patterns, make note of this as it can be strong evidence of the issue's impact.
5. Use Multiple Communication Channels: 
   - Create an official support ticket with the platform.
   - File a complaint with regulatory bodies like SEBI.
   - Consider using social media to draw attention to the issue, but remain professional and factual.
6. Provide a Detailed Breakdown: Write a clear, chronological explanation of what happened, including technical details if possible.
7. Calculate and Document Losses: Provide a detailed calculation of how the glitch impacted your trading and resulted in losses.
8. Be Persistent but Professional: Follow up regularly on your complaint, but maintain a courteous and professional tone.
9. Keep Records of All Communications: Save emails, chat logs and notes from phone calls with the platform's support team.
10. Seek Expert Advice: If the issue is complex or the losses are significant, consider consulting with a legal expert specialising in financial markets.
This Zerodha user's experience demonstrates that with proper documentation, persistence and a clear explanation of the technical issue, it is possible to achieve a favourable resolution even in cases of significant financial loss due to platform glitches. Traders should remain vigilant, be prepared to document any issues thoroughly and not hesitate to escalate matters when necessary to protect their interests in the fast-paced world of online trading.
Navigating the Twilight Zone of Dud Shares and Rematerialisation Charges
Sucheta Dalal, 13 July 2024
Admittedly, nine out of 10 investors in the stock market today began trading after 2020 and the COVID lock-down, primarily through the secondary market. Consequently, the issue I am writing about may seem foreign to them. However,...
4 Directors of Highbrow Market Research Arrested by CBI, Sent to Judicial Custody
Moneylife Digital Team 08 July 2024
A court in Kudal in Maharashtra has sent Girish Kumar Pahwani, Laxmikant Sharm, Hemant Agrawal and Swapnil Prajapati, the four directors of Indore-based Highbrow Market Research Pvt Ltd (Ways2Capital), to judicial custody. They were...
Overcharging by ICICI Securities: Beware of Unfair Margin Practices by Your Broker
Moneylife Digital Team 03 July 2024
As a common investor, it's crucial to be aware of the various rules and regulations governing your trading activities, especially when it comes to margin requirements. The recent arbitration case between an investor, Deepak Agrawal,...
Victims of Investment Adviser, High Brow, Seek Court Help for SEBI & CBI Action
Sucheta Dalal, 28 June 2024
In an era where influencers hawk snake venom as well as investment advice, and people routinely fall prey to dubious WhatsApp/Telegram groups promising sky-high profits, shouldn’t the market regulator, with its stringent reporting and...
Free Helpline
Legal Credit